August 17, 2024
Australian labor market added 58.2K new jobs in July while unemployment rate rose to 4.2% which is the record from the beginning of 2022. Data release is mixed as increase in new jobs does not however translate into unemployment descend.
Data shows the labor market is tight enough supplying more jobs regularly for at least of the last 4 month. 3-month moving average of employment change confirms this upward tendency (see chart).
At the same time unemployment keeps picking up, markedly accelerating in the last 3 months (see chart). This rise in unemployment occurs wile participation rate reaching its record highs meaning more people start looking for a job.
For now, unemployment still remains relatively low if compared with pre-pandemic levels. However its dynamic will dictate the behavior of police-makers in coming months as they try to balance a fight against inflation with the threat of looming recession.
⭐️Summary:
Labor market is still tight enough and RBA will keep it in mind while considering next steps in conducting monetary policy. Unemployment rises steadily but is still low, however, if it keeps going up police-makers will face the need to stimulate the economy.